Shackled with anemic inflation, Sweden’s central bank will probably face the next economic recession with its key interest rate still well below zero.
That’s what Captor Investment Management is betting. Wage growth won’t be high enough to bring price pressure back to the largest Nordic economy and with the upswing reaching a mature phase, it’s very likely inflation won’t stabilize around 2 percent before the next downturn starts, said Daniel Karlgren, who manages Captor’s 1.4 billion-krona ($130 million) fixed income fund Captor Iris Ränta.
“It’s starting to look like a Japan scenario where we will get an economic downturn before rates go up in Sweden or the euro zone,” he said in an interview on Monday.
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